What’s the Deal with Romney’s Taxes?

So what’s the deal with Romney’s tax returns? Or more specifically, what’s the deal with Mitt Romney letting himself get more and more nippy press by refusing to release his tax returns when virtually every serious presidential candidate of the last 40 years has done it? Allow me to explain.We already know Mitt Romney is a really, really wealthy guy. But there have been a lot of rich presidential candidates. And, though he was born to wealth, Romney also made a lot of money himself. He’s also said he’ll release information about his wealth, his assets … a lot of stuff. But just not the tax returns.

So what’s the deal? It’s pretty simple. We might say that a specter is haunting Mitt Romney — the specter of the Buffett Rule.

That’s right, we haven’t heard a lot about the so-called Buffett Rule in a while but it’s the concept pushed by kabillionaire Warren Buffett and embraced by Democrats and particularly the White House, which says that the superwealthy should not pay lower tax rates than your average secretary or auto mechanic or office manager or anybody else who gets by on a salary.

It’s a very resonant concept. It makes intuitive sense to people. Overwhelmingly the public supports the idea. And it’s very easy to understand.

This is Romney’s problem. While we don’t know the specifics of Romney’s tax returns, we know enough about his finances and sources of incomes to know that he is likely the poster-boy for the Buffett Rule. As Romney likes to say, he’s unemployed. He doesn’t draw a salary. But he seems to still be making big big money off capital gains which are currently taxed at a very low rate. He doesn’t seem to have drawn a salary at any time recently. So he likely pays no payroll taxes. And that’s before you get into legal but aggressive tax-sheltering. It seems virtually impossible that Mitt Romney doesn’t pay the sort of effective tax rate that would make people’s eyes pop when compared to middle income and even relatively wealthy (by normal standards) people who pay considerably higher rates.

That might cause a little problem in any election year. But issues of income inequality and particularly tax policy are right at the top of the political agenda in 2012. And that dictates keeping those tax returns under wraps as long as possible.